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No pain, no gain

Before the recent recession, the customer was king. Customer relationship management systems were all the rage and companies were tripping over themselves to provide the best client experience.

Currently, the focus for many organisations has switched to cost reduction and even corner-cutting. Although attempts to uphold good customer practice remain, many companies have found that their efforts have been compromised by the need to be lean.

Cutting corners

Unfortunately customers have noticed, increasing complaints and threatening to accelerate customer churn. Hotels that have changed contract cleaners to save money, or councils skimping on rubbish collections may find that the resultant economies are being cancelled out by the associated custom they are losing, or the rise in need for other services.

This is where organisations need to become smarter with customer monitoring and response practices by establishing the impact of cost-cutting exercises through customer complaints.

Yet complaints management is still lamentably basic in many organisations. For some, particularly those in heavily regulated industries, the discipline is often driven by necessity. In other sectors, it is a necessary cost – showing customers they care – but one that does not feed back into future decision-making, service prioritisation or budget allocation.

A study earlier this year discovered that five of the largest high-street banks in the UK remain poor at handling customer complaints. Those concerned – together accounting for 70% of all complaints about financial companies – routinely fail to learn from their mistakes and provide customers with a decent service, the FSA reported. One bank alone was deluged with 1,600 complaints a day last year, totalling 302,371 complaints over a six-month period.

Leaving complaints unsatisfied is dangerous, not just from a regulatory perspective. Previous studies found that, if a complaint is handled well, goodwill is not only retained, but the customer will tell on average nine people about their good experience. If handled poorly, by contrast, the word about the bad experience is spread to a scarily larger number.

Losing face on Facebook

Terrible times economically take their toll on customers, they expect better value for their money than ever, and are quicker to complain or defect when their expectations are not met.

A small but important percentage will vent their frustration directly to the company concerned, providing a valuable opportunity for organisation to restore equilibrium. A larger majority will stew and complain to their friends and family. A significant and growing percentage of these will go further, venting their frustration in highly emotive and unrestrained terms to the world via Facebook and Twitter or specialist complaint forums and review sites.

Hotels and holiday companies are now turning on TripAdvisor with threats of legal action highlighting just how damaging such grievances can be when aired so publicly. Now any customer can command a huge audience when their needs have not been met, potentially costing businesses dearly for years to come.

Be precise

To minimise the chances of this happening, organisations need to be on top of their complaints management, ensuring they capture and act on any feedback from customers, whichever channel this comes through.

Meaningful and actionable reports need to be generated from the data, allowing particular weaknesses and areas of concern to be swiftly identified and addressed, minimising any potential damage as grievances go viral and online sympathisers join the crusade.

In such instances, activity can be automatically tracked by the latest complaints management solutions, alerting managers to any mentions of the company online, so that early, pre-emptive action can be taken if the nature of this commentary takes a turn for the worst.

Turn a problem into an opportunity

Every organisation will experience complaints, however good it is compared to the competition. What separates the winners from the losers is how those complaints are dealt with. The company that fails to be readily reachable, to close the loop successfully on a complaint case, or to use the feedback to inform business improvements, is wasting a huge opportunity. It is also putting itself at risk of inflated customer service administration costs, brand-damaging back-stabbing, a loss of new business and accelerating customer churn – which, in the current climate, is particularly damaging.

Handle a customer complaint swiftly and well, on the other hand, and not only will this potentially save the business thousands in the long run, the positive side-effects could be significant as word-of-mouth marketing gathers its own momentum. While customers rarely give good feedback about companies when a holiday or shop purchase meets their expectations, they are much more likely to do this if they have been impressed and surprised by how a company has resolved a difficult issue.

The good news is that sophisticated complaints management has never been easier to put in place, thanks to online solutions which are available on a quick-to-deploy, pay-as-you-go basis. Intuitive and browser-based, these tools enable anyone across the entire organisation to handle feedback and will provide root-cause analysis of problems. No costly and laborious IT projects are involved to get access to the functionality, while integration with existing customer management systems can be seamless.

So, if you’re not taking customer complaints management to the next level in your organisation, there’s really no excuse. Or perhaps the business is not as serious about customer service as it claims…